Risk-Performance Sources, Profiles and Drivers

Risk in a supply chain is evidently influenced by a large number of different sources and factors. Categorizing these sources and factors may prove helpful in understanding the nature of SCRM. One possible categorization based on the model initially developed by Ritchie and Marshall (1993) suggests a categorization into seven groups of sources and risk drivers  

This formulation provides the basis for the variables grouped in Fig. 16.3, indicating that these variables not only influence risk (systematic and unsystematic) but also potential performance. Factors from the seven soiuces (Fig. 16.3), singly or in combination, determine the risk and performance profile for the organization at that point in time and for that particular decision or set of decisions. It is 

Portfolio of Risk and Performance Outcomes Performance Prolile Risk Profile 

It should be emphasized that the Framework relates not solely to those risks that pose a major threat to the survival and future development such as crises. More importantly, the Framework addresses those risks that have an influence on the ongoing normal performance of the business in terms of effectiveness and efficiency. However, it wotdd make sense to direct management attention only to the appropriate drivers which are likely to have a significant impact on the performance or risk profile. 

The tmderlying presirmption of the SCRM Framework is that the risk and performance sources and drivers can be foreseert, identified, evaluated, prioritized and managed. The practical reality suggests considerably more fuzziness relating to these drivers, their impact on performance and the effectiveness of possible 

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